The rise of protectionism and its challenge to globalisation
1 October 2021
The system of rules and regulations that has governed world trade for decades has slowly come under threat in recent years. Both planned and unforeseen events have shaken markets and countries, and the disorder they created has taken its toll on globalisation. Due to the effects of Brexit, the UK find itself more isolated than ever, while the pandemic created a worldwide rise of protectionism. Is this trend solely a contemporary act in unstable times or is it the beginning of a new, more inward-looking, world?
On 30 September, the SCC held its fifth volume of the “Emerging stronger” panel discussion, hosted by Nik Gowing, Director and Founder of Thinking the Unthinkable and former BBC news anchor.
The Chamber welcomed David Cairns, former UK Ambassador to Sweden and Vice President Political and Public Affairs at Equinor UK, Mats Persson, partner at EY UKI and former Chief of Staff to the Chancellor of the Exchequer and former Special Advisor to the Prime Minister as well as James Sproule, chief Economist, Handelsbanken and former Senior Business Adviser to the Prime Minister, to the discussion on the topic of protectionism and its challenge to globalisation.
The panel agreed on the definition of protectionism being complex, and that the notion of protectionism is constantly expanding in the sense of what and who it includes. David Cairns pointed out that we are seeing a geographical expansion of protectionism where not only countries are protecting their own borders and markets, but where the Western world, i.e. Europe and the US, is increasingly protecting its own markets in opposition to eastern Asia and, in particular, China. Mats Persson added that the expansion is not only geographical, but also in terms of focus. From the prior focus on physical and financial assets to a focus on things such as (Western) values, cultures, and democratic institutions.
James Sproule stated that the driver of protectionism is the fear of change. David agreed on protectionism being fuelled by fear, although emphasizing the fear of loss rather than change being the main issue.
The panel agreed on global warming and meeting Net Zero being a key issue when countries and business are to create a new, post-pandemic system. For the UK in particular, the creation of a post-Brexit state will pose challenges regarding the lack of workforce and how to cope with the same when workforce coming from the EU-region is decreasing significantly. On a global level, the tension between the East and West, with the US and China taking the lead, and a potential new world order will be the main driver for protectionism arising and persisting.
A special thanks to our speakers, our sponsor Handelsbanken and our partners at Thinking the Unthinkable and Swedish Chambers International.